2020 (1) TMI 1355 - HC - GST

Principles of Natural Justice - it is submitted that respondent was obliged to issue a notice upon the petitioner in form GSTR-3A seeking filing of the returns within a period of 15 days and it is upon failure of the petitioner in terms of such notice that any action could have been taken under the provisions of the act if so applied - liability of interest under Section 50 of the Act - HELD THAT - The order to be not assigning any reasons whatsoever. Also it is noticed that prior to passing of the impugned order no opportunity of hearing was ever afforded to the writ-petitioner. As such there was gross violation of principles of natural justice in passing of the impugned order which is hereby quashed - Petitioner shall appear before the appropriate authority on 28.01.2020 whereafter the proceedings shall commence afresh affording opportunity of proper hearing to the petitioner also enable to place on record additional material if so required/desired and only thereafter the officer shall pass a fresh order assigning reason in accordance with law.

Summary

Issues Involved:
Violation of principles of natural justice in passing the impugned order, jurisdictional error in the imposition of interest under Section 50 of the Bihar Goods and Service Tax Act, 2017.

Violation of Principles of Natural Justice:
The petitioner sought relief through a writ of certiorari to quash the order dated 26.09.2018 and the notice of demand issued under the Bihar Goods and Service Tax Act, 2017. The petitioner contended that the impugned order and consequential notice of demand violated the principles of natural justice and Section 46 of the Act. The High Court observed that the impugned order did not provide any reasons and the petitioner was not given an opportunity to be heard before the order was passed. Consequently, the court quashed the impugned order and issued specific directions for further proceedings. The petitioner was directed to appear before the appropriate authority for a fresh hearing, allowing the submission of additional material if necessary. The officer was instructed to pass a fresh order with proper reasoning, provide a copy of the order to the petitioner, and ensure that sufficient reasons are assigned. The court emphasized that the petitioner should cooperate, avoid adjournments, and the matter should be decided within three months, leaving all issues open for further review.

Jurisdictional Error in Imposition of Interest under Section 50:
The petitioner also challenged the imposition of interest under Section 50 of the Act, arguing that no tax liability existed for the period in question. The High Court acknowledged the petitioner's contention and held that the imposition of interest without any tax liability amounted to a jurisdictional error. The court directed that no interest under Section 50 could be attracted when no tax liability was due. The entire action of the respondent was deemed to suffer from a jurisdictional error. The court's directions for a fresh hearing and order also applied to this aspect of the case, ensuring that proper procedures and reasons are followed in any future decision regarding the imposition of interest under Section 50.

This detailed analysis of the judgment highlights the issues of violation of natural justice and jurisdictional error in the imposition of interest under the Bihar Goods and Service Tax Act, 2017. The High Court's thorough examination of these issues resulted in the quashing of the impugned order, with specific directions for a fresh hearing and proper reasoning to be followed in any future decision-making process.